It has been billed as a high street battle royale. In the red corner, the plucky underdog: fashion chain New Look bravely fighting alone but on behalf of the rest of the high street; and in the blue corner, the undefeated champion and the villain in this lop-sided bout: a burly gang of property landlords used to throwing their weight around with devastating results.
New Look is a strange beast. It retains a reputation as something of a “fashion giant”, and in purely size terms it is. The chain has more than 450 stores, a staggering number in an age where online shopping has brutally toppled the old-fashioned bricks and mortar model.
But the days when it was once considered a serious rival to fast fashion sensation Primark are long gone. A decade of financial engineering at the hands of private equity has left it fighting for survival.
In a desperate bid to stay afloat, its owners, which now include a pack of hedge funds, are attempting something unheard of from a retailer of such stature. As part of a financial restructuring - its second in 18 months - New Look is trying to strong-arm landlords into accepting new leases that would allow it to pay rent according to how much money each shop makes. It is the first time a major high street name has demanded blanket leases directly linked to turnover.
After decades of getting fat on upward-only rents, this is a real day of reckoning for landlords. They are presented with a stark choice: reluctantly accept the deal and share in the pain of one of their biggest tenants; or reject it and face another raft of stores being abandoned to the mice.
On the face of it, the least bad option, is option A. Better to have lower rents than none at all. But it’s not as simple as that. Any retailer worth its salt will be watching negotiations like a hawk. Landlords know that if they succumb to New Look’s brinkmanship, the floodgates will open as every other chain with a hefty rent bill demands a level playing field.
Victory for New Look then is far from a certainty but it could deliver a serious shot in the arm for the UK’s dying high streets. Besides, landlords have been getting fat on a horribly outdated upward-only rent model for decades. Reform of this archaic system is long overdue.
Travel firms must play fair
The Government’s decision to add France to the quarantine list has prompted understandable outrage. As someone who was planning to brave the Channel crossing next week, I cannot claim to be a disinterested party.
Still, another blanket ruling on a country where virus spikes are confirmed to a small handful of regions is once again ridiculously heavy-handed. It would be the same as banning foreigners from coming to the UK because there have been fresh outbreaks in Oldham and Leicester.
Tourists should be allowed to use their common sense and avoid the riskiest areas without being forced to self-isolate upon return. There will now be another scramble to cancel holidays as people decide that another fortnight cooped up at home is too big a price to pay for a week in the sun.
According to the Office for National Statistics, six in 10 adults would be put off from travelling abroad if they had to quarantine afterwards. A fifth have already scrapped holidays. Good luck to those forced into a mad dash for France’s airports and ports this weekend. Plenty won’t make it back in time.
£1bn was wiped off the stock market values of British Airways owner IAG, easyJet and Ryanair in trading today and industry figures lined up to lambast the move. Airlines UK, which represents the biggest carriers, said the decision was “another devastating blow to the travel industry already reeling from the worst crisis in its history”.
Travel association ABTA said the news would result in livelihoods being lost. But there was some welcome balance from Which. The consumer group rightly pointed out that the burden of “proportionately falls on holidaymakers”. Thankfully, I expect to get the large majority of my money back but others will face a long fight. Airlines and tour operators must act responsibly and ensure that refunds are issued quickly and without any unnecessary, hidden charges.
Godspeed fellow travellers.